GBM Resources Limited (GBM) has finalized a definitive agreement to sell its Mt Morgan Gold Copper Project tenements to Lithium Energy Limited (LEL). As part of the deal, Lithium Energy will also acquire adjoining tenements from Great Southern Gold Corp. GBM will receive ~$2.03 million in cash payments over two years, up to ~$1.67 million in contingent payments based on exploration milestones, and a 1.33% NSR royalty with a buyback option.
Lithium Energy commits to a $4 million expenditure over two years on the joint tenement package, targeting large-scale gold and copper discoveries. GBM’s Managing Director, Peter Rohner, stated the sale aligns with their strategy to concentrate on the Drummond Basin gold assets and repay their Convertible Note.
The transaction involves multiple agreements, including asset sale agreements and a royalty deed, with Lithium Energy subsidiaries acquiring interests in the Capricorn Project. The acquisition will occur in two tranches, with 51% interest transferred initially and the remaining 49% after 21 months. Key considerations include cash payments, contingent payments tied to milestones like JORC Mineral Resource Estimates and feasibility studies, and the NSR royalty.
Conditions for the agreements include due diligence satisfaction, execution of contracts, receipt of waivers, and regulatory approvals. Failure to meet expenditure or payment obligations could result in the transfer of interests back to the sellers or the formation of a joint venture. GBM covenants not to compete within a specified radius of the tenements for a defined period. The agreements are governed by Western Australian law.
